9911796707
TMI Blog2014 (7) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... 'race-club' is an 'establishment' within the meaning of the said expression as used Under Section 1(5) of the ESI Act. The ESI Act is a welfare legislation enacted by the Central Government as a consequence of the urgent need for a scheme of health insurance for workers - A 'shop' is a place of business or an establishment where goods are sold for retail. However, it may be noted that the definitions as given in the dictionaries are very old and may not reflect, with complete accuracy, what a shop may be referred as in the present day. The word 'shop' is not defined either in the ESI Act or in the notification. The ESI Act being a Social Welfare Legislation intended to benefit as far as possible workers belonging to all categories, one has to be liberal in interpreting the words in such a welfare legislation. The definition of a shop which meant a house or building where goods are sold or purchased has now undergone a great change. The word 'shop' occurring in the notification is used in the larger sense than its ordinary meaning. What is now required is a systematic economic or commercial activity and that is sufficient to bring that place w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extend to the Appellant also - Appeal disposed off. - H.L. Dattu, R.K. Agrawal And Arun Mishra, JJ. For the Appellant : K.K. Venugopal, Chander Uday Singh, J.P. Cama, V. Giri, Advs., M.N. Krishnamani, Sr. Adv., Ruchika, Neha Malik, Rajan Narain, V.J. Francis, Gobindram D. Talreja, R.N. Karanjawala, Manik Karanjawala, Ruby Singh Ahuja, Chahat Chawla, Neha Gupta, Advs. for Karanjawala and Company, M.A. Chinnaswamy, Mahesh Srivastava, Vaibhav Manu Srivastava, P.N. Puri, Yakesh Anand, Sonam Anand, Sanjeev Anand, P.V. Yogeswaran, S. Thananjayan, Rakesh K. Sharma, Sangita Chauhan and Shubha, Advs. JUDGMENT H.L. Dattu, J. CIVIL APPEAL NO. 2416 OF 2003, CIVIL APPEAL NO. 49 OF 2006, CIVIL APPEAL NO. 1575 OF 2006, CIVIL APPEAL NO. 3421 OF 2012 AND CIVIL APPEAL NO. 3422 OF 2012 1. The issue that arises for our consideration and decision is, whether a 'race-club' would fall under the scope of the definition of the word 'shop', for the purposes of notification issued under Sub-section (5) of Section 1 of the Employees' State Insurance Act, 1948 (for short, the ESI Act ). 2. The matter is referred to three-Judge Bench of this Court as two-Judge Bench of this Court is of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. 1978 (2) SCC 213. In our opinion, reliance on the aforesaid decision is wholly misplaced. The definition of 'industry' in the Industrial Disputes Act is very wide as interpreted in the aforesaid decision. We cannot apply the judgment given under a different Act to a case which is covered by the ESI Act. Under various labour laws different definitions have been given to the words 'industry' or 'factory' etc. and we cannot apply the definition in one Act to that in another Act (unless the statute specifically says so). It is only where the language used in the definition is in pari materia that this may be possible. Hence, we are of the opinion that the decision of this Court in the case of Hyderabad Race Club (supra) should be reconsidered by a larger Bench. In the meantime, the Respondents shall not raise any demand against the Appellant-clubs. Let the papers of these cases be placed before Hon'ble The Chief Justice of India for constituting an appropriate Bench. 3. By the said referral order dated 28.04.2009, it is the view of the two-Judge Bench of this Court that in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny establishment or class of establishments as specified therein. This Sub-section is an enabling conditional legislation. 7. The meaning of the words 'or otherwise' after the words industrial, commercial or agricultural establishments in Sub-section (5) of Section 1 indicate that the Government can extend the ESI Act or any portion thereof to any other establishment or class of establishments. The genus lies in the words 'any other establishment or class of establishment'. The three words industrial, commercial and agricultural represents a specie. Since the legislature did not want to restrict the operation of the ESI Act to these three species has used the catch words 'or otherwise'. 8. The Notification that prompted the Appellant-Bangalore Turf Club Limited to initiate proceedings before various forums read as under: NOTIFICATION In exercise of the powers conferred by Sub-section (5) of Section 1 of the Employee's State Insurance Act, 1948 (34 of 1948) the Government of Karnataka having already given six months' notice as required there under, vide the Government of Karnataka Notification No. SWL/134/LSI/76 dated 19.12.1976 published in the State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that is as per its traditional meaning. It is submitted that the Court should not prefer a liberal or expansive interpretation to ascertain the meaning of a 'shop', and that the literal rule of construction would be best suited to the given case. The learned Counsel would, in aid of his submissions rely on the view point expressed in the case of M/s. Hindu Jea Band v. ESIC (1987) 2 SCC 101; M/s. Cochin Shipping Co. v. ESIC (1992) 4 SCC 245; and Transport Corporation of India v. ESIC (2000) 1 SCC 332. It is further submitted that the case of ESIC v. R.K. Swamy and Ors. (1994) 1 SCC 445 and ESIC v. Hyderabad Race Club (2004) 6 SCC 191 requires reconsideration. He further submits that the common thread, as it would appear from the various judgments cited in this regard, for ascertaining whether a premises may be called a shop, would be that such a place is commonly used for the sale of goods or services or to facilitate the same. 12. Shri Venugopal would further submit that a club would not be covered under the scope and purview of 'shop'. It is submitted that a 'shop', in its traditional meaning, would necessarily be a building where goods are sold or kept f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er contends that it is inappropriate to refer to the definition of shop found in the Act, 1961 or the Act, 1948 as neither would be pari materia with the ESI Act. He further contends that the ESI Act is a beneficial legislation aimed at ensuring social security of employees and in view of the same the Court must adopt an expansive and liberal interpretation to achieve the objects and purpose of the ESI Act. Reference is made to the observations made in Cochin Shipping case (supra) and the R.K. Swamy's case (supra) and in Bombay Anand Bhavan Restaurant v. ESI Corporation (2009) 9 SCC 61. It is submitted that the nature of the activities of the race-clubs would be the same as the nature of the activities of a shop. For the said purpose, support is taken from the Memorandum of Association of the Bangalore Turf Club and to the impugned order of the High Court of Karnataka in Civil Appeal No. 2416 of 2003. 16. Shri Krishnamani, learned Counsel invites our attention to the doctrine of stare decisis and would submit that the principles utilized in interpreting and evolving the term 'shop' by this Courts in the country, since the year 1987, are well-established principles of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to secure sickness and disablement benefits and Article 43 accords decent standard of life. Right to medical and disability benefits are fundamental human rights Under Article 25(2) of Universal Declaration of Human Rights and Article 7 (b) of International Convention on Economic, Social and Cultural Rights. Right to health, a fundamental human right stands enshrined in socioeconomic justice of our Constitution and the Universal Declaration of Human Rights. Concomitantly right to medical benefit to a workman is his/her fundamental right. The Act seeks to succour the maintenance of health of an insured workman. The interpretative endeavour should be to effectuate the above. Right to medical benefit is, thus, a fundamental right to the workman. 6. Moreover, even in the realm of interpretation of Statutes, Rule of Law is a dynamic concept of expansion and fulfilment for which the interpretation would be so given as to subserve the social and economic justice envisioned in the Constitution. Legislation is a conscious attempt, as a social direction, in the process of change. The fusion between the law and social change would be effected only when law is introspected in the context of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve intention should be preferred to the one which would frustrate it.... 28. Dealing with this very Act, a three-Judge Bench of this Court in the case of Buckingham and Carnatic Co. Ltd. v. Venkatiah AIR 1964 SC 1272 speaking through Gajendragadkar, J., (as he then was) held, accepting the contention of the learned Counsel, Mr. Dolia that: It is a piece of social legislation intended to confer specified benefits on workmen to whom it applies, and so, it would be inappropriate to attempt to construe the relevant provisions in a technical or a narrow sense. This position cannot be disputed. But in dealing with the plea raised by Mr. Dolia that the section should be liberally construed, we cannot overlook the fact that the liberal construction must ultimately flow from the words used in the section. If the words used in the section are capable of two constructions one of which is shown patently to assist the achievement of the object of the Act, courts would be justified in preferring that construction to the other which may not be able to further the object of the Act. (Emphasis supplied) 21. In the case of Bombay Anand Bhavan Restaurant v. ESI Corporation (2009) 9 SCC 61 (at page 66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt pointed out that meanings of words used in Acts of Parliament are not necessarily to be gathered from dictionaries which are not authorities on what Parliament must have meant. It was also indicated that, where there is nothing better to rely upon, dictionaries may be used as an aid to resolve an ambiguity. The ordinary dictionary meaning cannot be discarded simply because it is given in a dictionary. To do that would be to destroy the literal rule of interpretation. It was observed in the given case that it would be a basic rule to rely upon the ordinary dictionary meaning of a word which, in the absence of some overriding or special reasons to justify a departure, must prevail. 25. In the case of State of Orissa v. Titaghur Paper Mills Co. Ltd. 1985 Supp SCC 280, this Court was concerned with determining the meaning of the terms 'timber' and 'logs' for the purpose of levying purchase tax. It was the contention of the State that the meaning of the said terms must be ascertained in common parlance. In this context it was held that (at page 374): (9) The dictionary meaning of a word cannot be looked at where that word has been statutorily defined or judicially in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary meaning, it would be appropriate to consider the following cases. 29. In the decision rendered by the Queen's Bench in Lyons v. Tucker (1880) 6 QBD 664, it was observed that a statute consists of two parts, the letter and the sense. In this regard it was noticed that it was the internal sense of the law that would make the law, and not the mere letter of the law. In the case of Caledonian Railway v. North British Railway (1881) 6 AC 114, it was held as under: The mere literal construction of statute ought not to prevail if it is opposed to the intentions of the Legislature as apparent by the statute and if the words are sufficiently flexible to admit of some other construction by which that intention can be better effectuated. 30. In the case of Sheikh Gulfan v. Sanat Kumar Ganguli (1965) 3 SCR 364, it was held that: ...Normally, the words used in a statute have to be construed in their ordinary meaning; but in many cases, judicial approach finds that the simple device of adopting the ordinary meaning of words does not meet the ends of a fair and a reasonable construction. Exclusive reliance on the bare dictionary meaning of words may not necessarily assist a proper constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t'. Dictionaries do define the meaning of a word as understood in common parlance. 35. According to Black's Law Dictionary, 7th Edition (1999), the term 'establishment' means, inter alia: Establishment, n. 2. An institution or place of business. 36. According to the Words and Phrases, Permanent Edition, Volume 15, the term 'establishment' has been held to mean, Inter alia, the following: An establishment means a permanent commercial organisation or a manufacturing establishment. Spielman v. Industrial Commission 295 N.W. 1, 4 : 236 Wis. 240.; An establishment is the place where one is permanently fixed for residence or business such as an office or place of business with its fixtures. Lorenzetti v. American Trust Co., D.C. Cal. 45 F. Supp. 128, 139. 37. According to Corpus Juris Secundum, Volume LXXX, the term 'establishment' has been explained as follows: ESTABLISHMENT ...More specifically, a fixed place where business is conducted, or a place where the public is invited to come and have its work done; an institution or place of business with its fixtures and organised staff; any office or place of business, with its fixtures, the place in which one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers issue to the punters printed betting cards on which are entered the bookmaker's name, the name of the horse backed, the amount of bet and the amount of prize money payable if the horse wins. The winning punters collect their money directly from the bookmaker concerned. The net result is that 75% of the tote collections of each race are distributed as prize money for winning tickets, 20% is paid as betting tax to the State and 5% payable to the Club as its commission. It is thus obvious that the Club is entitled to only 5% as commission from the tote collections and also from the total receipts of the bookmakers. According to the Appellant the punters who bet at the totalizator or with the bookmakers have no direct contract with the Club. 18. The Club pays from its own funds the prize money (stake money) to the winning horses. The horses which win the first, second, third and up to 5th or 6th places are given prizes by the Club. The Club income consists of entrance fee, 5% commission paid by the bookmakers and the totalizators, horse entry fee paid by the owners of the horses participating in the race and the licence fee charges by the Club from the bookmakers. 39. The term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Edition, Volume 39, the term 'shop' has been stated to mean, inter alia, the following: The word shop means a room or building in which the making, preparing, or repairing of any article is carried on, or in which any industry is pursued; the place where anything is made; the producing place or source. State v. Sabo 140 N.E. 499, 500 : 108 Ohio St. 200.; Worcester defines a shop as a place, building, or room in which things are sold; a store. Salomon v. Pioneer Co-operative Co. 21 Fla. 374, 384 : 58 Am. Rep. 667.; Webster defines the word shop as follows: (1) A building in which goods, wares, drugs, etc. are sold at retail; (2) a building in which mechanics work, and where they keep their manufacturers for sale. State v. O'Connell 26 Ind. 266, 267; Salomon v. Pioneer Co-operative Co. 21 Fla. 374, 384 : 58 Am. Rep. 667. According to Corpus Juris Secundum, Volume LXXX, the term shop has been explained as follows: SHOP As a noun. The word shop appears to be derived from the old high German 'schopf' or 'scopf' which meant a building without a front wall. It is a term of various significance, and has many definitions, and it may have different meanings when u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has now undergone a great change. The word 'shop' occurring in the notification is used in the larger sense than its ordinary meaning. What is now required is a systematic economic or commercial activity and that is sufficient to bring that place within the sphere of a 'shop'. 46. In view of the fact that an 'establishment' has been found to be a place of business and further that a 'shop' is a business establishment, it can be said that a 'shop' is indeed covered under, and may be called a sub-set of, the term 'establishment'. 47. The next point for our consideration is whether the activities of a race-club are 'entertainment'. The said meaning is sought to be ascertained in order to determine whether the Appellant-Turf Clubs are engaged in providing entertainment to those who come to their premises. Again, in the absence of any definition to that effect in the ESI Act, it may be relevant to understand its meaning in common parlance. 48. As per Concise Oxford English Dictionary, Eleventh Edition (Revised), the word entertainment has been assigned the following meaning: entertainment n. The action of providing or being provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of the term 'shop' for the purposes of the ESI Act. 53. It is not the case of the Appellants that the Club does not provide services. It may be gainsaid that the said services, apart from providing the viewers with a form of entertainment, is available to all members of the public at a mere payment of an admission or entrance fee. The only question, therefore, would be whether such services may be construed to be along the same lines as those provided for by a shop. If the answer is in the affirmative, then such race-clubs would surely fall within the definition of the term 'shop', and thereby under the ESI Act as well. 54. We have already noticed that a 'shop' is a business establishment where a systematic or organised commercial activity takes place with regard to the sale or purchase of goods or services, and includes an establishment that facilitates the above transaction as well. 55. We have also noticed that the modus operandi of the Appellant-Bangalore Turf Club is the same as that as has been mentioned in the case of Dr. K.R. Laksbmanan (supra), with a difference only in the percentages of tax and commission collected. The Appellant- T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been discontinued for the time being. These activities are provided for in the Memorandum of Association and therefore, the Turf Clubs may, legally and as a matter of right, resume them on a future date. 57. It can be safely concluded that, the Appellant-Turf Clubs conduct the activity of horse racing, which is an entertainment. The Appellant-Turf Clubs provide various services to the viewers, ranging from providing facilities to enjoy viewer ship of the said entertainment, to the facilitating of betting activities, and that too for a consideration- either in the form of admission fee or as commission. An argument may be advanced that not all persons who come to the race would avail the services as provided by the Appellant-Turf Clubs, however the same would fail as even in the case of a shop in the traditional meaning, that is to say, one where tangible goods are put for sale, a customer may or may not purchase the said goods. What is relevant is that the establishment must only offer the clients or customers with goods or services. In this light, it is found that a race-club, of the nature of the Appellants, would fall under the scope of the term 'shop' and thereby th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribe penalties for non-compliance with the said provisions. The Acts further enable the local authorities to appoint local inspectors who are given certain powers to ensure the compliance of the provisions of the Acts. Under Sub-section (4) of Section 48 of the Act, 1948 such inspectors would also be deemed to be inspectors under the Minimum Wages Act, 1948. Further, the Act, 1961 under Chapter V makes an express reference to the applicability of the Payment of Wages Act, 1936 and the Workmen's Compensation Act, 1923. There is a clear absence of reference to any other legislation in the aforesaid provisions, thereby indicating that the legislature intended to exclude the applicability of the ESI Act. 62. The ESI Act, on the other hand, as has been noticed in the preamble quoted earlier, is an Act that provides for certain benefits to employees in case of sickness, maternity and employment injuries. It establishes the Employees' State Insurance Corporation for the administration of the scheme of Employees' State Insurance and sets up an Employees' State Insurance Fund in which all contributions paid under the ESI Act are held and accordingly administered. The ESI A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is said that words are not static, but dynamic and the Court should adopt the dynamic meaning which upholds the validity or scheme of any legislation. It is settled law that the words used in a particular statute cannot be used to interpret the same word in a different statute especially in light of the fact that the two statutes are not pari materia with each other and have a wholly different scheme from one another. 67. The learned Counsel Shri Singh would contend that the notification dated 18.09.1978 uses the term 'namely' followed by description of goods. Therefore, it is exhaustive and by interpretation it is impermissible to add any other business or trading or commercial activity to come under the notification. 68. In this regard, it may be useful to refer to the decision of this Court in the case of Cochin Shipping Company (supra), which is a three-Judge Bench decision. In the aforesaid case the impugned notification used the term 'namely' and on a bare perusal the same is similar to the notification impugned in the present case by the Royal Western India Turf Club Limited. In the said case, the Court went on to observe, that, the term 'shop' be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taurant (supra), the language of the ESI Act may also be strained by this Court, if necessary. The scheme and context of the ESI Act must be given due consideration by this Court. A narrow meaning should not be attached to the words used in the ESI Act. This Court should bear in mind that the ESI Act seeks to insure the employees of covered establishments against various risks to their life, health and well-being and places the said charge upon the employer. 72. We find that the term 'shop' as urged to be understood and interpreted in its traditional sense would not serve the purpose of the ESI Act. Further in light of the judgments discussed above and in particular the Cochin Shipping Case (supra) and the Bombay Anand Bhavan Case (supra), this Court is of the opinion that an expansive meaning may be assigned to the word 'shop' for the purposes of the ESI Act. As has been found above, the activities of the Appellant-Turf Clubs is in the nature of organised and systematic transactions, and further that the said Turf Clubs provide services to members as well as public in lieu of consideration. Therefore, the Appellant-Turf Clubs are a 'shop' for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading to the dispute are that the Government of Tamil Nadu issued a Notification No. II(2)/LE/1859/76 dated 03.04.1976 as published on 21.04.1976. By the said impugned notification, the Government of Tamil Nadu sought to extend the provisions of the ESI Act over a given class of establishments as mentioned therein. Item 3 of the impugned notification enumerated six classes of establishments, one being 'shops'. As a consequence of the said impugned notification, the Respondent informed the Appellant-chit fund requiring them to comply with the provisions of the ESI Act. Hence the dispute. 81. Shri V. Giri, learned Counsel appearing for the Appellant-Chit Fund, in the first instance, would adopt the arguments of the learned Counsels appearing for the Appellant-Turf Clubs in Civil Appeal Mo. 2416 of 2003 and Civil Appeal No. 49 of 2006, as regards the contention put forth that other statutes may be referred to in aid of interpreting the word 'shop'. As 'shops' has not been defined under the ESI Act, learned Counsel would argue that the Tamil Nadu Shops and Establishments Act, 1947 may be referred to for guidance. This line of arguments has already been negated b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
